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Ashley Madison gets an ‘open-minded’ facelift

Company repositioning brand in hopes that users will give cheating website a second chance

Rob Segal, left, CEO of Ruby Corp., and James Millership, president, in their new office space under construction at Yonge and Eglinton Sts. Ruby Corp. is the parent company of brands such as Ashley Madison, CougarLife, and Established Men. (Chris So / Toronto Star) | Order this photo

A detail of the Ashley Madison website in 2015. The website’s new management team say they've changed its core purpose, which had been facilitating extramarital affairs.
(Carl Court / GETTY IMAGES)

In this 2014 file photo, Noel Biderman, then-chief executive of Avid Life Media Inc., poses during a portrait session. Ashley Madison's new management team refers to the website as "her." (Eugene Hoshiko / The Associated Press File Photo)

Ashley Madison — or just “Ashley,” as the hookup website’s new management team calls “her” — has more users now than before last year’s infamous cyber attack, according to the men brought in for her massive makeover.

Toronto-based Ruby Corp. — formerly Avid Life Media — said Ashley Madison currently has 49 million users — up from 36.5 million in July 2015, the month before a high-profile hack that exposed clients’ personal details including home addresses.

Gone are the fake female profiles and false security promises that came to light when hackers made public the company’s user profiles and sensitive internal documents last year.

Most conspicuously absent from the newly polished Ashley: the site’s core purpose — its promise of facilitating extramarital affairs.

“We wanted to humanize her, so we started talking about Ashley as ‘her.’ ” said Rob Segal, CEO of Ruby Corp.

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“We wanted to help her because she needed some love and support like a starlet that needed to get back on her path.”

Segal said since he took over the CEO reins early this year and began to “reposition” the brand, female visitors to the site have grown by 20 per cent.

“And females are the gold standard for all online dating.”

Before the hack, the company said, the site’s male-to-female ratio was 6:1, now it’s 5:1 (by comparison OK Cupid claims it has 1.5 men for every woman on the site).

Despite the management shakeup and a shift in public relations tactics, the life-or-death question looms: can the target of one of the most public data breaches of all time pull off a comeback?

Public perception aside, Ruby still faces major hurdles: multimillion-dollar class-action lawsuits and an investigation by the U.S. Federal Trade Commission. Segal said the company cannot comment on those ongoing investigations. He also declined to comment on the financial implications if the users’ lawsuits succeed.

Meanwhile, the rebranding challenges Ashley faces are threefold: expand the customer base away from those seeking affairs, attract more women with a female-friendly approach and convince users their data is safe.

Ruby’s new leadership team of CEO Rob Segal and president James Millership took the reins in April, replacing former CEO Noel Biderman, who resigned at the end of August 2015, within weeks of the Toronto company’s highly publicized hack, the perpetrators of which have still not been found.

The parent company of Ashley Madison, and other controversial dating sites such as CougarLife and Established Men, changed its name in July to Ruby — a moniker chosen for its feminine, modern, multi-faceted and clean associations.

The new Ashley Madison is focused on facilitating “open-minded” hookups, such as for polyamorous couples or singles looking for a BDSM partner — or all of the above.

“The fastest-growing category (in dating websites) is this open-minded one, as people really begin to question 20th-century values and apply a new 21st-century approach to human sexuality,” Segal said.

He and Millership are familiar with turning companies around. After selling the once-struggling e-sports company World Gaming to Cineplex in September 2015, they were ready for a new challenge.

So, when recruiters came knocking, they were game — with some caveats.

“I knew the story too, who didn’t?” Segal recalled.

“So I talked to James about it and I said ‘Do you want to try this one on for size?’ ”

Before agreeing to come aboard, the pair conducted nearly five months of investigation into the company — bringing in consultancy Ernst & Young to audit its customer base and Deloitte’s cybersecurity team to improve its online payment system and monitor the site around the clock.

The audit found that the company had been using fake female profiles, as data from the hack suggested, but the practice ended in late 2015.

It also found that 45 per cent of users were actually single — and those who were married weren’t necessarily looking for a real-life affair.

“We thought the company could reposition itself, if it first could address what had happened,” Segal said.

“We wanted to change the wrapper of Ashley, we wanted to move it away from the approach it had taken before, which was shock-and-awe tactics and it didn’t appeal to women.”

But they face a unique turnaround challenge, “because there were so many things going wrong all at once” said Michael Mulvey, a marketing professor in the Telfer School of Management at the University of Ottawa.

“The data in their system is the epitome of what you’d want to keep private and discreet: especially since that was such a big part of their brand promise.”

Despite legitimate and expensive efforts to beef up security, the company might not be able to shake the perception it’s untrustworthy, he said.

“I’m curious to know whether consumers are forgiving and forgetful.”

Still, he believes the company stands a chance of recovery because the nature of the industry it’s in attracts risk takers.

“They’re a bit more Teflon in that industry, stuff doesn’t seem to stick as much,” he said.

“They have this core appeal to the fundamental pleasure principle — seeking gratification, doing what maximizes pleasure and not worrying about the consequences.”

For better or worse, Ashley Madison has massive brand awareness. And that was the key reason they decided to stick with the moniker, rather than start from scratch with a new “open-minded” dating site.

“We felt that the online dating space was exploding and we thought the company had the size and the cash flow. It would be a very difficult space to enter if we were not of that size,” Segal said.

And the team sees a massive opportunity in this space — what they believe is a middle ground between run-of-the-mill dating sites and the other extreme — escorts and porn.

“We looked at dating as a continuum,” Segal said, adding that competition in the “open-minded” middle is small and disparate.

“We want to go out and acquire or build other brands,” Millership said, adding that they’re exploring opportunities in other “open-minded” markets such as Italy, France, Brazil and Japan.

But before they can conquer the open-minded world, the pair have to focus on repositioning the brand in its home base of North America.

To that end, the site’s former slogan “Life is short, have an affair,” has been replaced with simply “Find your moment.”

The “find your moment” campaign taps into feedback from users who spoke of how being on Ashley Madison made them feel sexy, desired or wicked in the moment.

One of its new ads recently aired on NBC — the first time Ashley Madison has been allowed to advertise on prime-time network television, the partners boast.

But the new Ruby heads are also well aware that their major challenge is dealing with the security fallout from the hack.

Ruby agreed to a list of compliance terms with privacy commissioners in Canada and Australia this summer. Management said the company is ahead of schedule on putting the recommended cybersecurity measures in place.

And in its most recent move to convey how serious it is about cybersecurity, the company brought in Chantal Bernier, former Canadian privacy commissioner as a special adviser.

Ruby’s new management realize they’re not going to build the trust of customers overnight, but they are betting there are enough curious people out there open-minded enough to give the cheating website a second chance.

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